Adoptive Parents: Don’t Delay Your Adoption Credit Refund

Update March 14, 2013 — If you're claiming the non-refundable adoption credit for 2012, please see Adoption Tax Credit. The credit is not available for 2013.

Are you claiming the refundable adoption credit for tax year 2010 and/or 2011?

Many taxpayers and their tax professionals claiming the newly-expanded adoption credit are slowing down their refund by failing to include required documentation, such as an adoption order or decree, with their return. If you do not attach all the required documentation such as an adoption decree or subsidy agreement to your return or your taxpayer’s return, your refund will be delayed.

Because of these documentation requirements, any taxpayer claiming the adoption credit must file a paper return, rather than filing electronically, and attach all required documentation. It is necessary for the IRS to review the documents submitted. Normally, for a tax return claiming the adoption credit, it takes about six to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached.

However, processing times vary. Because the IRS must verify the submitted documents, because the documents issued by states, counties and foreign countries are not uniform, and because the documentation may need to be supplemented, it is difficult for the IRS to estimate the time it will take to process any particular return.

Taxpayers may also be asked, after filing their returns, to substantiate any qualified adoption expenses they paid.

The adoption credit, at up to $13,360 per child, is the largest refundable tax credit available to individual taxpayers.

If you plan to claim the credit, avoid refund delays by following these tips:

Fill out and attach to your return Form 8839, Qualified Adoption Expenses.

Include with your return one or more adoption-related documents. Required documentation varies, depending upon whether this is a domestic or foreign adoption, whether the adoption has been finalized and whether it is for a child with special needs. For a list of acceptable documents, see the Instructions for Form 8839.

Use IRS Free File to prepare your return. Again, because of the documentation requirement, you cannot e-file your return. Instead, print out your return and mail it to the IRS, along with all required documentation.

Were you contacted by the IRS about your adoption credit claim?

The IRS is committed to processing adoption credit claims quickly, but it also must safeguard against improper claims by ensuring the standards for this important credit are met.

If your return is selected for review, please keep in mind that it's necessary for the IRS to ensure the legal criteria are met before the credit can be paid. If you are owed a refund beyond the adoption credit, you will still receive that part of your refund while the review is being conducted.

You will be notified by the IRS if your return is selected for review. Once the initial review of your return is complete, you will receive a subsequent notice explaining the steps you need to take such as providing certain documentation to resolve the issue. If no additional steps are necessary, we will notify you that we have processed the credit and released the remaining refund. (8/4/11)

If you receive a notice about your filed tax return, follow these simple tips:

Each letter and notice offers specific instructions on what you need to do to satisfy the inquiry. Review the correspondence and compare it with the information on your return.

Mail or fax the requested documents and information, along with the bottom tear-off portion of the notice, to the IRS address or fax number shown on the notice. Allow at least six weeks for a response.

Taxpayers should call the phone number on the notices they receive from the IRS if they have questions.

The IRS appreciates the assistance of those providing the documentation needed to protect this important credit to ensure only those who qualify receive it.